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| Statement |
|---|
| We are proud that we continue to gain in spec share as well |
| Our balance sheet continues to be a source of strength for Fox and underpins our capital allocation strategy |
| And so that growth is fantastic in the upfit business |
| On a positive side for PVG even with the external headwinds just mentioned this business grew organically for the year by 21% over the prior year illustrating the growth of our market share and the power of our product portfolio |
| And then in AAG, again, fantastic growth over the last couple of years with the upfit business |
| From a PVG perspective, again, last year, fantastic growth when you think about it with 21% year-over-year growth with a UAW headwind and a slow ramp-up |
| So, again lots of lots of strong growth opportunities here and then strong accretion in the margin side as well |
| Feel like we're well-positioned to demonstrate some growth there as well |
| There are clearly continuing to see strong growth in the back on strong growth in softball |
| And finally chassis availability and mix improvement in our upgraded truck product lines |
| Expansion in our kid sales is also driving future growth in our outdoor business |
| We think there's an opportunity for improvement in that business this year |
| Our OE partners have begun to place new orders for model year 25 product which is a positive sign that we will begin returning to a normal environment in late Q2 |
| And given our robust pipeline of innovative products, industry-leading market share and best-in-class brands |
| However because of our strong and flexible capital structure, we are working from a position of strength during this downturn and investing in our future |
| These results were better than our expectations for both the top and bottom lines especially since the prior year period included the CapEx that launch |
| The key drivers from Marucci revenue were strong, new product sales driven by direct to player and team sales plus additional product launches in Japan led by aluminum and wood bats |
| Like our other businesses we are inspired by the level of execution in the Marucci team and their ability to have an incredible product road map across all product lines throughout 2024 |
| anchored by industry leading aspirational brands deep-rooted customer loyalty driven by the pro athletes and robust pipeline of innovative market disrupting products and our incredibly talented and dedicated team members |
| Our Aftermarket Applications Group, AAG delivered a 3.5% increase in net sales in the fourth quarter compared to the same quarter last year |
| The OE 2025 model year launches remains scheduled to begin midyear and we are excited as our innovative new products have maintained and gained spec share across our customers |
| In the second half of 2024, we expect to see growth driven by easing macro pressures and improved consumer outlook with expected interest rate easing |
| First support model-year 25 releases that we believe will introduce innovative and best in class products and thereby expand our share of the market |
| We expect to see sequential improvement into the second quarter as Bike Wheels prepare for model year 2025 releases, chassis mix and availability improve model year change for Ram has launched and the expectation that the interest rate environment improves |
| A bright spot was our recently expanded e-commerce business that expanded on 2023's record high direct-to-consumer sales which were 3.6% of sales last year up 260 basis points from 2022 |
| And finally the ongoing growth of our e-bike category which we continue to believe will expand the demographic of riders and drive growth within the industry |
| On to PVG which delivered $524 million up 21% year on year, due to multiyear momentum gains with Toyota and Ford and strong mix improvement as high end vehicles in automotive and power sports upgraded to more technologically advanced FOX suspension products |
| At the same time, I am very pleased with our strategic positioning |
| AAG was up 13% year-on-year to $551 million mainly on the customer real House acquisition and strengthen our upfit business despite the impact of dealer floor plan financing and the UAW impact |
| However, we are encouraged that the higher end of it continued to see strong consumer demand and interest |
| Statement |
|---|
| As we have previously highlighted three main factors created new challenges in near-term results |
| Powered Vehicles Group, PVG delivered a 10.7% decrease in net sales in the fourth quarter compared to the same quarter last year |
| In the Powered Vehicle Group, net sales were $118 million, down from $133 million in the prior year quarter due to the direct impact of the UAW strike on our production and the indirect impact of the strike on original equipment manufacturers, who ramped slowly as expected following the strikes conclusion |
| Our net sales and EPS are lower year-on-year in Q1, given the continuation of bike OE destocking overhang from the UAW strike that impacted chassis availability and mix, model year changeover timing which is delaying dealer purchases and weaker demand from powersports and PBG |
| Net sales in the Specialty Sports Group decreased 41.4% compared to the fourth quarter of 2022 due to the persistent level of high inventory across various channels and therefore fewer new model year launches |
| Strike along with the slower than anticipated ramp-up also delayed upcoming development programs with OEs which we expect will impact first half sales for 2020 |
| Overall, we delivered $1.46 billion in net sales down 9% from 2022 |
| This performance was negatively impacted in October during the UAW strike given OE manufacturing site closures and for the remainder of the year on a slower ramp-up given OE supply chain disruptions |
| As we saw the really significant reduction in December to February, that they're having some inventory challenges |
| This combination of direct and indirect influence from the strike resulted in lower production, which led to lower sales |
| The decrease in full year sales is driven entirely by the decline in SSG's bike sales |
| PVG also had reduced sales in power sports given dealer and distributor conservatism with inventory |
| I appreciate it's a difficult environment for sure, and I appreciate visibility is a challenge |
| And then you have dealer floor plan financing just really inhibiting dealers from taking more risk and putting the product on their lot |
| Adjusted EBITDA margin decreased to 17.8% in fiscal year 2023 compared to 20.1% in fiscal year 2022 |
| But we came a long way, until let's say, Labor Day and then just some softness in the UAW |
| We continue facing headwinds in AAG |
| Fox Factory's gross margin was 27.7% in the fourth quarter of 2023, a 430 basis point decrease from 32% in the same period in the prior year |
| So, clearly there's been some deterioration in demand |
| All of the year-on-year decrease is attributable to Specialty Sports Group were our bike business was down $309 million year-on-year or 45% as always dealt with a massive inventory glut |
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